Privately held wind farmer First Wind last week filed a prospectus with the Securities and Exchange Commission in which it said it would seek $450 million via an initial public offering. Should you be buying? I won't be. Here's why.
Backstory
First Wind expects to trade under the symbol WNDY on the Nasdaq, joining Thomas & Betts
I understand the allure, especially for cheapskates. Solar stocks are sexy and more likely to be overvalued. First Solar
But that's changing, thanks to oil tycoon T. Boone Pickens. He says wind is the next growth industry. I believe him. I also think that Foolish colleague Ryan Fuhrmann is right when he calls Denmark's Vestas Wind Systems (OTC BB: VWSYF.PK) the class of the industry. So, apparently, do most of the investors who've rated Vestas in our 110,000-strong Motley Fool CAPS community:
Metric |
|
---|---|
CAPS stars (out of 5) |
***** |
Total ratings |
213 |
Bullish ratings |
212 |
Percent bulls |
99.5% |
Bearish ratings |
1 |
Percent bears |
0.5% |
Bullish pitches |
47 |
Bearish pitches |
0 |
Data current as of Aug. 4, 2008.
First Wind differs from Vestas in two key areas. First, it's a farmer. Vestas, by contrast, is like General Electric
Take the tailwind
I like First Wind's story. Within five years, the prospectus says, management expects to have secured 1,407 megawatts of wind energy via farms on both coasts, Hawaii, and the western Plains -- about five times more than the 274 at the end of this year.
What I don't like is the capital needed to fulfill this promise. I'd rather bet on those built to reap the hundreds of millions that First Wind and its peers will be spending. Turbine suppliers like Vestas, for instance.
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